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I want to talk to you about something that's tremendously important to all
Californians
but especially vital to our most seasoned Californians
our seniors
The California Department of Insurance is the number one consumer protection
agency in our state.
Our highest priority is protecting California consumers whether they need
assistance finding the right insurance or protecting them from scam artists.
Our Department is here to help. California seniors have contributed much
throughout their lives to better our communities it is therefore alarming
that insurance scam artists are praying on their good nature.
The Department of Insurance is aggressively pursuing agents and
companies that illegally target seniors and we're working to strengthen state
laws to prohibit bad behavior and make annuity products easier to understand.
But the best way to combat this problem is to work together.
Today I want to share some information with you in case you are approached by a
pushy or deceptive insurance agent.
Not all agents engage in high-pressure sales but some do. The tips
and information in this video will make a huge difference in preventing you
from being a victim of a potential scam.
Let's take a look.
Deciding when any investment is right for you as hard enough but
annuities can be very complicated because there's so many kinds of varying
terms and different payment plans.
At its simplest an annuity is an investment in the form of an insurance
policy issued by an insurance company.
You pay money in the form of a premium to the insurance company in exchange for
a guaranteed
minimum interest rate to increase the initial investment.
Then either right away or after a period of years.
The insurance company pays you a monthly amount either for a set number of years
or
for the rest of your life. Annuity policies might sound pretty good
but there are things about these policies that could make them a very bad
choice for you, the senior investor.
For example, there are often hefty charges if you want to withdraw some of
your money early.
The surrender charges can also apply at the time of your death
and will reduce the amount that your heirs will inherit.
In addition, it often turns out that the advertised interest-rate applies only in
the first year that you put money into the annuity.
Even worse is that sometimes, if the stock market does badly, you could
actually lose money.
These insurance policies are very complicated
so you need to be careful that you're not
taken advantage of.
Take a look at the scenes that follow.
These are examples of how you can protect yourself from high-pressure
sales tactics.
You don't want to end up with an annuity
that is wrong for you.
At your convenience. In the comfort of your own home, of course.
With no obligation.
We'll give you a call about when we can set up a time to chat about your particular
situation
and see what's best for you.
So what's wrong with this picture?
There's free coffee.
You've learned something that will help you pass your assets on your children and
grandchildren.
The fellow seems nice enough.
So what's the harm giving him your phone number?
Well let's see another way to handle it.
John
uh... I learned a lot today but instead of me giving you my phone number
I would like to get your card
so I can find out more information.
But if you don't sign the sheet and give us your phone number I can't call you and
you might miss out on something important. But that's okay John
uh... I'll think about it. I'll talk to my daughter
and uh... I might give you a ring, but thanks for the food.
You're welcome.
I know it feels uncomfortable to reveal to people that you don't trust them.
Even more to the point,
this discomfort is what certain high-pressure sales people
and some unscrupulous insurance companies rely on.
But it's ok not to trust everyone.
Sometimes we confuse having something in common with someone as a reason
to trust them.
We let them in.
And sometimes that's a mistake.
See if you can recognize the mistakes Mrs. Lewinsky is about to make.
[door bell]
Why John.
I wasn't expecting you. I was just the neighborhood visiting Mrs.
Smith around the corner and I thought I'd stop by and say hello.
Did you see her at the living trust seminar?
No, I don't believe I know Mrs. Smith.
Oh, she says she sees you walking your dog. Well hello there fella...
What's his name?
Her name is Anastasia. Oh, Anastasia, like the lost Russian princess.
Are you Russian? Are you Anastasia? No wonder you wanted some financial advice.
No I'm not Anastasia.
But I do have a fondness for Russian cookies.
Can I offer you some? Why thank you.
Well
Mrs. Lewinsky
Now that you're the fourth quarter, so to speak
it would be great to make a touchdown, wouldn't it?
and just pass the ball to your son?
John
what are you talking about?
Oh, it's just a little football metaphor I noticed the picture of your son and
I was thinking
that a living trust as part of the financial plan with good investments
would make a great gift for him
ultimately.
Well, I was thinking about getting my affairs in order.
That's why I went to the seminar.
But I don't know what I need.
I don't want to be a burden to my son,
he has enough on his plate.
So, you're looking for
a lifetime income
that will keep you independent.
Well I was only interested in the living trust.
Of course, we can take care of that too.
Now I'm going to need some information
about your current investments and I'll take care of everything.
So it's all set up now.
And I'd be happy to drive you over to the bank so that you can change your name on all
the accounts into the name of the trust.
But before we go I'd love some more of those cookies.
Certainly John
You know Mrs. Lewinsky
you could be making a lot more money than you are now with those bank CDs and
your stock accounts, too.
I know all about an annuity that pays nine percent guaranteed.
I don't know how much longer the insurance company can afford to operate
like that.
I told my own mother she should jump at it.
It's an insurance policy because you pay in the money
and it protects you from the ups and downs of the market while
guaranteeing a hefty return.
You know I could save you the trouble of
changing all your account names too.
So if you'll just sign these papers I can get started
on getting your accounts closed out and into an annuity right away.
That seemed like a pretty normal get-together didn't it?
Well, what happened?
John was picking up on all kinds of visual cues to make a connection with
Mrs. Lewinsky.
It's a very common way try to gain trust.
Perhaps he was just being a good salesman.
Or perhaps he was trying to trick her.
The Department of Insurance has investigated cases in which an agent
tricked people into emptying their bank accounts and selling their stocks to pay
for an annuity contract.
The agent received a substantial commission and the victims lost money.
Mrs. Lewinsky would have made more money
if she had stayed with her original investments
How could Mrs. Lewinsky protect yourself against this kind of
smooth talker?
[door bell]
Oh!
John
I wasn't expecting you today.
Oh I was just in the neighborhood visiting with Mrs. Smith around the corner and
I thought I'd stop by and say hello.
Did you see her at the seminar?
I don't believe I know Mrs. Smith.
What can I do for you today, John?
Uh, can I come in, uh,
Mrs. Lewinsky
and get you started on your living trust? oh, did I mention that you can shelter
your assets in an annuity
so that you can get on MediCal?
We won't be doing that today John.
I need a chance to look over the information that I picked up from you.
I'll call you when my son can be here while we talk.
What does you son do, Mrs. Lewinsky?
My son looks after my money and investments and we won't be talking without him.
Thank you for stopping by, John.
So long.
Two heads really are better than one.
Always have someone you trust with you when you're discussing your money or
investments
Even if the sales person is not a stranger to you investments and
insurance are very complicated.
According to California law,
a sales person must give you written notice that they want to meet with you
at your home
at least twenty four hours in advance.
But if you do find yourself with the sales person in your house
don't be fooled into thinking that he's going to look after your financial
interests
just because you have something in common
like an interest in football
or cookies.
It might be tempting for Mrs. Lewinsky to just sign something to get rid of John.
Never sign anything on the spot
with someone standing over your shoulder.
Never sign forms that would give the agent permission to transfer your money
and never, ever sign blank forms.
If it's a good deal today
it'll also be a good deal tomorrow.
The best course of action
is to not let anyone into your home
but if you find yourself in the living room with John...
John, it's been very nice chatting with you today but
I'm not feeling very well
Okay it'll just take a minute for me to go through your files to make sure that we
okay ill disfigurement for me to go through your files to make sure that we
haven't missed anything that should be liquidated to fund the Pro-Am
guaranteed nine percent annuity
that way
I can drive into the bank later
and take care of everything and
get it out of the way.
I don't want to be impolite,
but i'd like you you to leave now.
Why don't you just sign these authorizations and I'll make the
transfers for you Mrs. Lewinsky that way you can make sure that you don't
miss locking up this stellar interest rate.
John,
I need more time to look over this information.
So I won't be signing anything today.
But I'll call you when
I've looked it over.. why don't I just show you to the door.
But there's a thirty day free look period anyway that means you can cancel
at any time and get all your money back
so you might as well sign then I don't have to bother you again
you can just cancel if you decide against the annuity you can just put all
your money back and put it into the mutual funds with no consequences
Isn't there a tax problem to selling mutual funds?
Well, I won't be signing anything today.
Goodbye, John.
Mrs. Lewinsky, you don't have to be so rude!
Annuities are very
complicated investments that
may not be right for you
because they can't lock your money up for a long time.
You need to make sure you keep enough money outside of the annuity to take care of
unforeseen expenses
You also need to know what interest rate the annuity will pay past the first year
You'll also need to look at how much risk you want to take on
and decide between
an annuity with a fixed interest rate
or one that will vary.
Look closely at the terms of the annuity
read the documents
ask questions to make sure you understand them
and take notes.
Don't be a victim!
always know and understand anything you sign
If an offer seems too good to be true it probably is too good to be true
the salesperson insists that you sign right away
That's a danger sign.
If it's a reputable deal it will still be available next week.
If you don't understand something
ask questions there are no stupid questions.
Never allow someone to try to sell you insurance or an investment
without giving you the time to think about it
and without a trusted friend or relative by your side.
You always have the power to say no!
After all it's your money.
There's no shame in becoming confused about financial planning
and if you do it's okay to end the talk at any time.
Honest sales people understand
and will not pressure you further.
Honest salespeople will not insist
that they talk to you alone.
The law
is on your side.
And we are on your side.
To help you at any time
call the California Department of Insurance Hotline
at 1-800-927-HELP
Today there are more insurance options for seniors than ever before. With so
many choices picking the right one can seem like a daunting task
the California Department of Insurance is here to help you make those important
decisions we want to make sure you feel equipped to make informed
assessments of your insurance needs and options.
If you have any questions about an insurance product, agent or broker, don't
hesitate to call the Department of Insurance at 1-800-927-HELP
Thanks for joining us today and we look forward to hearing from you.
[music]